Greif Earnings Up Despite Flat Sales

Second-quarter pre-tax earnings for the Greif Companies of Hanover Township, Lehigh County, rose 10 percent to $5.4 million on flat sales of $30.9 million, the company reported yesterday.

Norman Fryman, Greif president and chief executive officer, said the flat sales are indicative of lethargic sales in the men's clothing industry, but said planning and management pulled out a profit for Greif.

Fryman said some of Greif's competitors reported a loss for the quarter. "Compared to that, running flat is good," he said.

"What is happening to retail stores is that nobody is really doing great," Fryman said. He said the new car business and housing markets are feeling the same economic pinch.

"The general economic feeling is that people are not running out to spend a lot of money," Fryman said. "There's not a lot of traffic in the stores."

If men don't buy suits, they at least buy shirts and ties, Fryman said, but even sales for those categories are off.

Recent increases in the cost of wool drove up the cost of clothing and played a small part in the flat sales, Fryman said.

Greif managed a pre-tax profit, Fryman said, because it planned its clothing lines and had fewer goods to dispose of at the end of the season.

For the first half of the year, Greif's pre-tax earnings were up 33 percent to $8.4 million on sales that grew 3 percent to $61 million.

Fryman said sales for the second half of the year probably will remain flat with earnings slightly ahead of last year's.

Greif's parent company, Genesco Inc. of Nashville, Tenn., reported a 57- percent increase in net earnings to $5.6 million for the second quarter. Net sales were up 4.2 percent to $119.5 million.

The results translated in fully diluted earnings of 24 cents per share compared to 19 cents a share for the previous second quarter.